Passengers are concerned about speed and fairs

13 june 2017
| Gudok

"The demand for travel on the Allegro trains is a good example of how international passenger train service can develop," Analytical Center expert Alexey Safronov said in an interview to the Gudok newspaper.

Aleksey SafronovDepartment for State-Run Programs and Budgeting

"Speaking of international passenger rail service, we have
to distinguish between two categories of service here: there are trains that
run between Russia and countries outside the former USSR, and trains that run
between Russia, the CIS, and the Baltic states. This distinction is important
because there are significant differences in the trends we are seeing in these
two categories of international passenger train service," the expert said.

To begin with, the number of passengers traveling by train
to countries outside the former USSR is about ten times less. It is easy to see
why, given that for travel distances in excess of 1000 km people normally
choose air travel. At the moment, the niche that long distance trains occupy is
500 to1000 km.

"Long distance train travel to countries outside the former
USSR increased gradually until 2013, then declined somewhat in 2014-2015, and
then picked up again in 2016. In 2016, a total of 641,000 people were carried,
which is somewhat less than in 2014, but on the whole comparable to that year's
figure," Mr. Safronov said. In his opinion, the decline in passenger travel was
not due to the Federal Passenger Company's services deteriorating, but rather
because of the Ukrainian crisis.

"The effect was even greater in the CIS. Passenger train
travel between Russia, the Baltic States and the CIS were declining slowly in
2010-2013, the number of passengers leaving Russia by train to destinations in
the former USSR fell from 19.5 million to 18.3 million between 2010 and 2013,
and then it collapsed. In 2014, only 10 million people were carried by train
within the former USSR and less than 7 million in 2015. The Federal Passenger
Company has not yet published its statistics for 2016," the expert summed
up.

So, if we want to talk about ways to boost the number of
international train passengers, we need to realize that there are a lot of
problems that Federal Passenger Company simply has no control over, Mr.
Safronov believes.

In addition to political conflicts, the deprecation of the
ruble and the plummeting of the real household income have also made their
contribution to the decline in passenger traffic. Administrative barriers have
not disappeared either. Passenger rail transit across Russia is currently
developing only in the form of tourist trips along the Trans-Siberian railway
that involve excursions to see the sights along the way, and at the Passenger
Forum held last April it was noted that the main obstacle to having more
tourists on the Trans Siberian route is the tortuous and expensive procedure
that foreigners have to go through to get a Russian visa. The Federal Passenger
Company has no control over any of these factors.

"At the same time, if we look at the trend in the number of
passengers carried by the Allegro trains that run between Saint Petersburg and
Helsinki, it becomes clear that it is too early to throw in the towel just yet.
The number of passengers carried by the Allegro trains is comparable to that
carried by all Russian trains to destinations outside the former USSR. And it
is not just that Finland has the same track gauge as Russia and thus the trains
don't need to change the bogies when crossing the border, which saves time: the
Russian Railways has actually put quite a lot of effort into developing its
model international train," the expert says.

Mr. Safronov also noted that passengers are interested in
the speed and price of train rides but different passengers have different
priorities. More emphasis should be made on proper market segmentation based on
travel destinations: for those destinations where people tend to be more
affluent (Western Europe and China), efforts should be focused on reducing the
time of travel and improving the quality of service, while for destinations in
the former USSR, more options should be offered at different price points. The
success of high speed rail demonstrates that there are plenty of passengers
willing to pay more for speed and high quality rolling stock.